Robert Graham Hynd V. David J. Armstrong And Others+messrs Bishops, Solicitors And Others
| Jurisdiction | Scotland |
| Judge | Lord President,Lord MacLean,Lord Reed |
| Judgment Date | 27 February 2007 |
| Neutral Citation | [2007] CSIH 16 |
| Date | 27 February 2007 |
| Published date | 27 February 2007 |
| Court | Court of Session |
| Docket Number | XA158/04 |
| FIRST DIVISION, INNER HOUSE, COURT OF SESSION | |
| Lord President Lord Reed Lord MacLean | [2007] CSIH 16 XA158/04 OPINION OF THE COURT delivered by LORD REED in APPEAL TO THE COURT OF SESSION under section 37 of the Employment Tribunals Act 1996 by ROBERT GRAHAM HYND Appellant; against (FIRST) DAVID J. ARMSTRONG and OTHERS; and (2) MESSRS. BISHOPS, SOLICITORS and OTHERS Respondents: _______ |
Act: Fairley; Harper Macleod (Appellant)
Alt: Napier, Q.C.; MacRoberts (Respondents)
27 February 2007
INTRODUCTION[1] On 1 January 1999 the appellant became an employee of Bishop & Robertson Chalmers, a Glasgow firm of solicitors. On 1 August 1999 that firm merged with an Edinburgh firm, Alex Morison & Co, to form the firm of Morison Bishop, with offices in both Edinburgh and Glasgow. Following the merger, the appellant was employed by Morison Bishop at their Glasgow office. He worked there as a solicitor specialising in corporate law and education law, with the title of "commercial consultant".
[2] In January 2002 three of the partners in the firm ("the pension partners") intimated that they were resigning with effect from 31 July 2002. Later in 2002, most of the partners based at the firm's Edinburgh office ("the Edinburgh group") intimated that they were dissolving the partnership with effect from 31 July 2002. It was their intention to form a new Edinburgh-based firm, to be known as Morisons, with effect from 1 August 2002. The remaining partners ("the Glasgow group") then explored a number of possibilities. By early June 2002, they had decided to form a new Glasgow-based firm, to be known as Bishops, also with effect from 1 August 2002.
[3] During June and July 2002 the Glasgow group undertook preparations for the formation of Bishops. One of the matters which they had to consider was the range of services to be offered by Bishops and the staff which it would require to employ. The Glasgow group included two of the partners in Morison Bishop's corporate law department. Below partner level, the corporate law department employed two solicitors, namely the appellant and Ms R. The Glasgow group decided that the corporate law department of Bishops should comprise the two partners and Ms R. During June 2002, the appellant was informed that he was likely to be made redundant. He was finally made redundant on 31 July 2002. A letter to him from Morison Bishop, dated 31 July 2002, stated:
"The decision has now been taken to discontinue the post of Commercial Consultant and in the circumstances I must formally advise that your employment will terminate at close of business today by reason of redundancy."
The decision to make the appellant redundant was taken by the Glasgow group on behalf of Morison Bishop, under authority that had been agreed with the other partners in the firm.
[4] On 1 August 2002 Morisons and Bishops each commenced practice, and the pension partners joined the firm of Biggart Baillie.
[5] In Scotland, a firm is a legal person distinct from the partners of whom it is composed: Partnership Act 1890, section 4(2). It was common ground, in the submissions before us, that the firm of Morison Bishop ceased to exist on 31 July 2002, and that the firm of Bishops came into existence on 1 August 2002.
[6] Following his dismissal, the appellant brought proceedings before an employment tribunal against the former partners of Morison Bishop (the first respondents) and Bishops (the second respondents), complaining that he had been unfairly dismissed. Before the tribunal, both parties' submissions proceeded on the basis that there had been a transfer of an undertaking (or part of an undertaking) by Morison Bishop to Bishops, within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (SI 1981 No.1794) ("the Regulations"). The submissions to this court proceeded on the same basis.
[7] The respondents' primary contention before the tribunal, as narrated in its decision, was "that the appellant's dismissal was a redundancy per se and that the transfer and the circumstances surrounding it were merely the occasion of what was otherwise a redundancy dismissal." What this appears to mean is that the appellant was dismissed because he was surplus to the requirements of Morison Bishop. That contention was rejected by the tribunal:
"While it is true that there was some material that might suggest that a redundancy situation may have materialised at some stage had the de-merger not occurred, we think that that was only possible - and by no means probable ... [W]e are not prepared to hold that the dismissal was a redundancy per se and we reject [the respondents'] submissions on that point."
The tribunal's decision on that matter was not challenged before this court.
[8] The remaining contentions before the tribunal concerned the application of regulation 8 of the Regulations. The appellant relied on regulation 8(1):
"(1) Where either before or after a relevant transfer, any employee of the transferor or transferee is dismissed, that employee shall be treated for the purposes of Part V of the 1978 Act and Articles 20 to 41 of the 1976 Order (unfair dismissal) as unfairly dismissed if the transfer or a reason connected with it is the reason or principal reason for his dismissal."
The respondents, on the other hand, submitted that the appellant had been dismissed for an economic, technical or organisational reason falling within regulation 8(2):
"(2) Where an economic, technical or organisational reason entailing changes in the workforce of either the transferor or the transferee before or after a relevant transfer is the reason or principal reason for dismissing an employee -
(a) paragraph (1) above shall not apply to his dismissal; but
(b) without prejudice to the application of section 57(3) of the 1978
Act or Article 22(10) of the 1976 Order (test of fair dismissal), the dismissal shall for the purposes of section 57(1)(b) of that Act and Article 22(1)(b) of that Order (substantial reason for dismissal) be regarded as having been for a substantial reason of a kind such as to justify the dismissal of an employee holding the position which that employee held."
[9] In relation to these provisions, the respondents' submissions, as recorded by the tribunal, appear to have focused on the intention of the Glasgow group of partners in Morison Bishop, prior to the transfer, that Bishops should concentrate on litigation and property law, with less emphasis on corporate law.
[10] The primary submission for the appellant, on the other hand, as recorded by the tribunal, was to the effect that the dismissal was in fact by reason of the transfer, and regulation 8(1) therefore applied. In those circumstances, regulation 8(2) could not apply. Reliance was placed in that connection on the decision of the Employment Appeal Tribunal in Kerry Foods Ltd v Creber [2000] ICR 556. That argument was rejected by the tribunal, and was not pursued before this court. The tribunal proceeded on the basis that paragraphs (1) and (2) of regulation 8 were not mutually exclusive, but that paragraph (2) operated to displace a preliminary conclusion that paragraph (1) was applicable (cf Warner v Adnet Ltd [1998] ICR 1056). Secondly, it was submitted that for there to be an "economic, technical or organisational reason" falling within regulation 8(2), that reason would have to have been held by Morison Bishop, rather than by the new firm, since it was Morison Bishop which dismissed the appellant. Morison Bishop could not have had such a reason, since they were ceasing to exist. If in reality what happened was that the Glasgow group of partners in Morison Bishop decided to dismiss the appellant on the basis of their intentions as to the extent to which the Morison Bishop workforce would be taken on by Bishops, that was not a decision as to the future conduct of the business of Morison Bishop.
[11] The tribunal held that regulation 8(2) was applicable. They referred in that connection to the decision of the Court of Appeal in Whitehouse v Charles A. Blatchford & Sons Ltd [2000] ICR 542, which concerned a situation where an employee had been made redundant by the transferee following the transfer of an undertaking, on the basis that he was surplus to the future requirements of their business. The tribunal stated:
"In Whitehouse the Court of Appeal emphasised that the words 'economic, technical and organisational reason ... entailing changes in the workforce' clearly meant that the reason must be connected with the future conduct of the business (see also Wheeler [Wheeler v Patel [1987] ICR 631]). In Whitehouse the dismissal was related to carrying on the service which the respondents had been successful in obtaining the contract for. While it is true that in that case the redundancy selection exercise was carried out after the transfer, we do not think that matters, given the wording of reg 8(2). Morison Bishop's (the transferee) reason for the dismissal was an ETO one [i.e. an economic, technical or organisational reason] entailing it changes in prospective firm of Bishops (the transferee) in connection with the future conduct of the business, i.e. the part of the undertaking which was the subject of the relevant transfer to them. That appears to us to fall plainly within Reg 8(2) ...
Finally for the sake of completeness we hold that the reason was a composite reason of economic (predominantly) and organisational factors entailing changes in the workforce of the transferee after the relevant transfer. The applicant was not required for the future conduct of the transferee's business after the transfer.
[The solicitor for the appellant] also submitted that what was important to look at here was the transferor's reason rather than the transferee's and the transferee's reason could not matter as they were not in existence. While that might be true from a technical point of view (i.e. that the...
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